GM CEO Asked to Step Down by Board of Directors

Yesterday we reported that GM CEO Fritz Henderson resigned unexpectedly at General Motors’ monthly board meeting after only eight months in the top position. It turns out GM’s board of directors asked him to step down as they felt he was not bringing enough change to the automaker.

“The board decided — and Fritz agreed — that given where we are, it was time to make some changes,” said Chris Preuss, GM spokesman, at a press conference.

The announcement of Henderson’s departure underscores the tough oversight GM’s new board of directors is using to direct the company. Ed Whitacre, now GM’s interim CEO, leads the board of directors selected by the automaker’s majority shareholder, the U.S. Treasury.

Although the U.S. Treasury picked the board of directors, the White House did not influence the decision for Henderson to step down. “This decision was made by the board of directors alone. The administration was not involved in the decision,” said a White House spokeswoman.

In March, the Obama administration ousted previous GM CEO Rick Wagoner, signaling that it wanted some changes to be made. As a lifetime employee at GM, critics were skeptical of Henderson’s ability to make the necessary changes and make them quickly as the corporate structure at GM was overbearing. Eight months in the top spot at GM proved the critics correct as Henderson, like Wagoner, was asked to step down.

For the time being, Ed Whitacre will step in to lead GM as the search for a permanent CEO begins. Whitacre says he wants to pull the new CEO from outside GM, much like Ford did when it hired Alan Mulally. However. Whitacre says the pay restrictions imposed on GM make it hard to hire external talent.

Source: Reuters